American Medical Technologies Reports Second Quarter Results.Business Editors, Health & Medical Writers CORPUS CHRISTI Corpus Christi, in Christianity Corpus Christi [Lat.,=body of Christ], feast of the Western Church, observed on the Thursday after Trinity Sunday (or on the following Sunday). , Texas--(BW HealthWire)--Aug. 15, 2002 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Medical Technologies, Inc. (Nasdaq:ADLI) reported a net loss was ($2,601,634) for the three-month period ended June June: see month. 30, 2002 compared to a net loss of ($806,699) for the same period in 2001. The loss of profitability for the three-month period was primarily due to a decline in sales and expenses associated with the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). program enacted in the second quarter. For the six-month period ended June 30, 2002, net loss was ($3,390,380) compared to a net loss of ($701,866) for the same period in 2001. The Company reported revenues of $2,712,343 for the three-month period ended June 30, 2002 compared to $3,697,468 for the same period in 2001, a decrease of 27%. The Company had revenues of $5,767,315 for the six-month period ended June 30, 2002 compared to $8,193,239 for the same period in 2001, a decrease of 30%. The decreases in revenues are primarily attributable to a decline in domestic unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. under the direct sales model coupled with a decline in international sales as a result of the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the distributor agreement with the Company's former Japanese distributor. Due to the continued decline in sales, the Company re-evaluated its business model, hired Roger Dartt as its new CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. effective June 1, 2002 and adopted a restructuring plan in mid-June that will significantly reduce operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . The Company decided to abandon its direct sales model and return to its previous business model of selling domestically through dental dealers. As part of this new direction, the Company closed its remaining sales and service branches and reduced its number of employees by approximately 50%. The Company recorded a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $827,679 in the second quarter of 2002, which consists primarily of severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when for terminated employees, expenses related to the closure of the Company's remaining sales and service branch offices and service vehicle lease terminations. "American Medical Technologies has a long history of being an innovative leader in the dental industry," said Roger Dartt, the Company's CEO. "The restructuring plan allows the Company to concentrate on its core strengths of technology development and product innovation. "Our previous direct sales structure diverted di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. our energies and resources away from our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
The Company makes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this report and may make such statements in future filings with the Securities and Exchange Commission. The Company may also make forward-looking statements in its press releases or other public shareholder communications. The Company's forward-looking statements are subject to risks and uncertainties and include information about its expectations and possible or assumed future results of operations. When the Company uses any of the words "believes", "expects", "anticipates", "estimates" or similar expressions, it is making forward-looking statements. The Company claims the protection of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 for all of its forward-looking statements. While the Company believes that its forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements, which speak only as of the date made. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond the Company's control or are subject to change, actual results could be materially different. Factors that might cause such a difference include, without limitation, the following: the possible failure to maintain the Company's ability to borrow under its line of credit, the potential inability of the Company to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. the line of credit indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. currently in default prior to the expiration of the bank's forbearance Refraining from doing something that one has a legal right to do. Giving of further time for repayment of an obligation or agreement; not to enforce claim at its due date. A delay in enforcing a legal right. agreement and the other line of credit due in October of 2002, the Company's potential inability to hire and retain qualified sales and service personnel, the potential for an extended decline in sales, the possible failure of revenues to offset additional costs associated with its change in business model, the potential lack of product acceptance, the Company's potential inability to introduce new products to the market, the potential failure of customers to meet purchase commitments, the potential loss of customer relationships, the potential failure to receive or maintain necessary regulatory approvals, the extent to which competition may negatively affect prices and sales volumes or necessitate ne·ces·si·tate tr.v. ne·ces·si·tat·ed, ne·ces·si·tat·ing, ne·ces·si·tates 1. To make necessary or unavoidable. 2. To require or compel. increased sales expenses, the failure of negotiations to conclude OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and agreements or strategic alliances and the other risks and uncertainties set forth in this report. Other factors not currently anticipated by management may also materially and adversely affect the Company's results of operations. Except as required by applicable law, the Company does not undertake any obligation to publicly release any revisions which may be made to any forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date of this report. American Medical Technologies, Inc. headquartered in Corpus Christi, Texas Corpus Christi is a coastal city and the county seat of Nueces CountyGR6 in the U.S. state of Texas. It is part of the region known as South Texas. , develops and manufactures advanced technologies for dentistry dentistry, treatment and care of the teeth and associated oral structures. Dentistry is mainly concerned with tooth decay, disease of the supporting structures, such as the gums, and faulty positioning of the teeth. and markets them worldwide. It is listed on the NASDAQ SmallCap Market under the symbol "ADLI". The Company's website is found at: www.americanmedicaltech.com
American Medical Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2002 2001 2002 2001
--------------------- ---------------------
Revenues 2,712,343 3,697,468 5,767,315 8,193,239
Cost of products sold 1,814,135 1,979,143 3,596,142 3,962,095
---------- ---------- ---------- -----------
Gross profit 898,208 1,718,325 2,171,173 4,231,144
Selling, general
and administrative 2,436,129 2,336,155 4,344,111 4,555,754
Research and development 181,873 151,228 294,421 301,733
Restructuring costs 827,679 --- 827,679 ---
---------- ---------- ---------- -----------
Income (loss) from
operations (2,547,473) (769,058) (3,295,038) (626,343)
Other income (expense):
Other income 4,775 6,384 15,687 27,691
Interest expense (58,936) (32,025) (111,029) (79,214)
---------- ---------- ---------- -----------
Net income (loss)
before taxes (2,601,634) (794,699) (3,390,380) (677,866)
Income taxes --- 12,000 --- 24,000
---------- ---------- ---------- -----------
Net income (loss) $(2,601,634) $ (806,699) $(3,390,380)$ (701,866)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Net income (loss)
per share $ (0.36) $ (0.12) $ (0.48) $ (0.10)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Net income (loss)
per share assuming
dilution $ (0.36) $ (0.12) $ (0.48) $ (0.10)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
American Medical Technologies, Inc.
Condensed Consolidated Balance Sheets
June 30 December 31
2002 2001
---------------------------
(Unaudited)
ASSETS
Cash $ 380,892 $ 579,667
Accounts receivable 486,622 1,272,703
Inventories 5,935,528 7,182,780
Other current assets 368,045 310,669
----------- -----------
Total current assets 7,171,087 9,345,819
Property and equipment, net 1,890,170 2,090,970
Assets held for sale 28,500 --
Intangible assets, net 2,668,466 2,759,641
Total assets $11,758,223 $14,196,430
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 2,397,854 $ 2,751,270
Compensation and employee benefits 148,906 262,703
Other accrued liabilities 644,679 518,916
Accrued restructuring costs 698,556 --
Current notes payable 2,332,075 1,959,075
----------- -----------
Total current liabilities 6,222,070 5,491,964
Other non-current liabilities 35,519 78,048
Stockholders' equity 5,500,634 8,626,418
----------- -----------
Total liabilities and stockholders' equity $11,758,223 $14,196,430
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